CIT Substituting Its Judgment for Commerce's Role, US Honey Producers Argue

The petitioners, the American Honey Producers Association and the Sioux Honey Association, argued that CIT had overstepped the bounds of its standard of review.

The trade court ordered the change after Commerce assigned exporter Apiario Diamante Comercial Exportadora, known as Supermel, a rate based on adverse facts available because Supermel had failed to reconcile its costs with the cost of two of its beekeeper suppliers. The exporter went before CIT arguing the discrepancies were minor because it relied on more than a thousand small, independent beekeepers (see 2212140005).

American Honey Producers noted that the court’s remand order said, “[b]ased on its own examination of the questionnaire responses and included exhibits, the court concludes that these findings are not supported by substantial evidence on the record of the antidumping duty investigation.”

But “the Court’s role … is not to reweigh the evidence,” it said. Despite this, it said, the court’s ruling “directed what documentation Commerce needed or did not need from Supermel to reach a determination based on substantial evidence.”

“That improperly substituted the Court in the role of Commerce as the expert finder of fact,” it said.

The petitioner also took issue with the department’s claim, after the remand, that AFA wasn’t warranted for Supermel.

It called it “evident” that Supermel reported incorrect prices for its third-country sales and said the exporter even itself acknowledged it had misreported some packing expenses. Supermel also misclassified certain Australian honey sales in a way that “significantly impact[ed]” the CONNUM, it said.

And Supermel also provided deficient responses to multiple prompts in its Questionnaire in Lieu of Verification, the petitioner argued. For example, the exporter responded to only one part out of the four-part Question 25, it said.

The trade court held that that incomplete response had warranted another notice of deficiency before application of AFA, but American Honey Producers said it respectfully disagreed. It claimed that, “though the two questions were worded differently,” Commerce had previously asked for the same information in a supplemental questionnaire.

“Commerce asked a clear question and Supermel failed to respond,” it said.

And American Honey Producers took aim at Supermel’s two controversial suppliers, referred to in court documents as “Beekeeper 1” and “Beekeeper 2.”

Beekeeper 1 claimed it based its costs reporting on “recollections” and “reasonable assumptions” without explaining what either of those were, American Honey Producers said. But it failed to accurately capture these costs; for example, it submitted its 2020 tax returns as part of its costs reporting, but only told Commerce during verification that those returns only covered half its expenses, the petitioner said.

Beekeeper 1 also claimed that it hadn’t incurred any significant general or administrative costs during the period of inquiry, American Honey Producers said.

“Any operational business, even a small one, incurs certain G&A and financial expenses such as expenses for utilities, insurance, office supplies, etc.,” it said. “Beekeeper 1 knowingly understated its costs.

Beekeeper 2, meanwhile, likewise failed to report all its costs, the petitioner claimed. It said that, when asked for supporting documents such as invoices or receipts to confirm its top five beekeepers’ sales quantities and values, Beekeeper 2 said that “the Brazilian regulation does not require us to issue official documents.”

But the supplier also “acknowledged that it does maintain records of these transactions, as it must report purchases of honey in its tax returns on a monthly basis,” American Honey Producers said.